Greenspan Echoes Carper’s Call for Corporate Accountability

WASHINGTON, DC – Federal Reserve Chairman Alan Greenspan today echoed Senator Tom Carper’s call for strict accountability from corporate executives and reflected Carper’s sentiment that, despite a shaken stock market, the economy is headed in the right direction. Carper is a member of the Senate Banking Committee, which authored the tough accountability reform measures that passed the chamber yesterday unanimously. During the hearing, Carper questioned Greenspan on the need for accountability. “Our trade deficit last year was about $300 billion. The worst thing that could happen for us at a time when we need to attract foreign investments would be to send a message that the United States is not a good or safe place in which to invest. Chairman Greenspan sent the right message by demanding CEOs be held accountable,” Carper said. “When CEOs break the law, they should be fully prosecuted under the law. If what they’ve done is an offense for which they can be imprisoned, we ought to put them there. Chairman Greenspan agrees that CEO’s shouldn’t be allowed to profit from financial misinformation or from manipulation of their books.” Carper questioned Greenspan on the need to hold CEO’s accountable, the role that foreign investment plays in enabling us to finance that trade deficit and why restoring investor confidence in our markets is important as we deal our burgeoning trade deficit. “My original view was that taking accounting standards and moving them out of the private sector was really utterly unnecessary, because my view was always that accountants basically knew or had to know that the market value of their companies rested on the integrity of their operations,” Greenspan said to Carper. “Their self-interest is so strongly directed at making certain that their reputation was unimpeachable that regulation by government was utterly unnecessary and, indeed, most inappropriate. I was wrong.”